Toronto: Canadian stock futures posted strong gains on Wednesday, driven by investor optimism over potential U.S. Federal Reserve rate cuts and a surge in precious metal prices. Futures for the S&P/TSX index advanced 0.7% in early trading, reflecting renewed confidence across key sectors.
The boost followed dovish-leaning remarks from Federal Reserve Chair Jerome Powell, who left the door open for further interest rate reductions. Markets interpreted his comments as a signal that a 25-basis-point cut could be on the horizon, fueling enthusiasm among investors for rate-sensitive sectors.
Rising precious metal prices provided additional support to the markets. Gold surged past the $4,200-per-ounce mark for the first time, while silver climbed 3% to $53.60 per ounce, building on its previous record high. The rally in metals, including platinum and palladium, helped lift the materials sector, with investors seeing safe-haven opportunities amid geopolitical uncertainties.
Corporate earnings also bolstered market sentiment. ASML, the global leader in semiconductor equipment, reported strong third-quarter results, exceeding analysts’ expectations. Similarly, solid earnings from major U.S. banks enhanced optimism, signaling stability in financial markets that reverberated northward to Canadian investors. However, Canadian firms showed mixed results, as Goodfellow, a building materials company, reported a decline in third-quarter net earnings to C$3.7 million from C$5.8 million a year earlier.
Despite the bullish tone, market sentiment remained cautious. Escalating trade tensions between the U.S. and China, including the announcement of new 100% tariffs on Chinese goods and Beijing's export controls on rare earths, weighed on investor confidence. Additionally, oil prices softened amid warnings from the International Energy Agency about potential supply surpluses in 2026, alongside concerns that trade tensions could suppress global demand.
Analysts note that while the current rally is encouraging, markets are likely to remain sensitive to developments in U.S. monetary policy, commodity price trends, and ongoing geopolitical frictions. Investors will closely watch upcoming corporate earnings and economic indicators to gauge whether the momentum in Canadian equities can be sustained.